Taxpayers may have to foot the bill for millions of pounds in compensation payouts to Rotherham’s child sexual exploitation victims, it has been revealed.
A total of 34 women are suing Rotherham Council and South Yorkshire Police over failures that allowed them to be abused – with the victims forecast to be in line for average payouts of about £100,000 each.
Rotherham Council says it may have to either borrow money or use cash from land and asset sales to meet the costs.
Coun Paul Lakin, council leader, had previously said it was hoped any compensation payments could be funded through council insurance policies. However, the council has now admitted it is uncertain how much its insurers will pay. Police have also revealed they are in discussions with their insurers as they await compensation claims.
David Greenwood, from Switalskis Solicitors, the firm representing the women, said he is hopeful out-of-court settlements can be agreed – but it may take more than a year before cases are concluded.
He said: “These girls have had to live with the trauma of everything that has happened to them and their lives have been put on hold. They have suffered the appalling consequences of grooming and exploitation.
“Compensation should help them redress some of the problems they have faced.”
In a letter to MPs, former council chief executive Martin Kimber recently said it would be ‘helpful’ if the Government was willing to issue so-called ‘capitalisation directions’, which allow councils to fund spending through either borrowing or capital receipts, such as money raised through the sale of land or other assets.
A council spokeswoman said the issue is ‘hugely complex’ and the potential impact on the council’s budgets will be clearer once discussions with the authority’s insurers about ‘the extent to which the council’s insurance policies can be used’ to pay compensation have concluded.
She said any potential capitalisation directions would have to be approved by the Department for Communities and Local Government.
Mr Kimber also revealed the council expects to spend about £2 million in responding to the independent Jay report, which it commissioned and whose results were published last year.
The report, by Professor Alexis Jay, found at least 1,400 children in the town had been abused between 1997 and 2013 – with police and council bosses being aware of the problem but failing to act.
In the next two years, the council expects to spend more than £1m on IT improvements that include linking systems to a geographic database on sexual offender profiles.
It will also spend about £750,000 over the next three years on extra support for victims and hiring a dedicated child sexual abuse co-ordinator and more staff to deal with extra case referrals.
Mr Kimber said the cost of additional external support to assist with the several investigations that have started in response to the scandal is likely to be at least £200,000 over the next two years.
The council has made cuts of more than £93m since 2010 and is planning another £23m during 2015/16.
South Yorkshire Police, which is in the process of trying to save £49m by 2016, said it is in ‘dialogue with its insurers’ about the issue.
The Reverend Dr Alan Billings, South Yorkshire police and crime commissioner, said: “Tackling child sexual exploitation remains a priority and any financial implications will have to be dealt with through our financial planning processes.”
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